DuluxGroup’s NPAT Declined By 13.9% In 1HFY19 Result

  • May 15, 2019 AEST
  • Team Kalkine
DuluxGroup’s NPAT Declined By 13.9% In 1HFY19 Result

DuluxGroup Limited (ASX: DLX) is an ASX listed company which is in the business of manufacturing of branded products, includes a portfolio of retail paints, decorative concrete, protective coatings and so forth. The company has approximately 4,000 employees and operates globally in countries like Australia, New Zealand, China, UK etc.

Financial Results

On 15th May 2019, the company announced its 1HFY19 result for the half-year ended 31st March 2019. The total revenue of the group stood at $892.86 million in 1HFY19 which is down by 1.5%, compared to the reported revenue of $906.40 million in 1HFY18. Apart from divested China business, the sales revenue demonstrated the growth by $2.2 million (+0.2%). The revenue impact is in line, with the outlook provided with the FY18 full-year results. The reason for the impact was quoted to be the comparison with exceptionally strong market growth in the prior corresponding period (pcp). Some of the company’s brands that have helped in revenue generation are as follows:

EBITDA also saw a decline in the current reporting period. The EBITDA was reported at A$126.9 million, declining by 2.9% from the previously reported number of A$130.7 million. The net profit tax (NPAT) declined by 13.9% from A$79.2 million in 1HFY18 to A$68.2 million in 1HFY19.

Due to the decline in the net profit, the basic earnings per share also declined from 20.7 cents per share (cps) in 1HFY18 to 17.9 cps in 1HFY19.

On the balance sheet front, the company the total assets increased from $1.28 billion in 1HFY18 to $1.32 billion in 1HFY19. In the non-current assets, derivative financial assets increased from $34.76 million to $56.56 million and intangible assets increased from $225.77 million to $235.11 million in the same period. The total liabilities also increased from $857.78 million in 1HFY18 to $872.17 million in 1HFY19, including interest-bearing liabilities increasing from $391.92 million to 455.36 million in the same period.

On the cash flow front, the company generated net cash of $20.76 million from operating activities compared to $36.86 million generated in 1HFY18, including $66.9 million of cash outflow towards a decrease in trade and other payables and provisions. Net cash outflow from investing activities was reported at $17.02 million, the highest expense incurred towards payments for property, plant etc. Cash flow from financing activities was reported at negative $24.7 million for the reporting period. As on 31st March 2019, the company had net cash of $35.01 million which reduced from 53.12 million in 1HFY18.

Dividend declaration

The company also declared an interim dividend of 15 cps and a special dividend of 28 cps which combines to a total dividend of 43 cps both of which are payable on 28th June 2019. The ex-date and the record date for these dividends are 21st June and 24th June 2019 respectively.

FY19 Outlook

The company expects annual depreciation and amortisation expense to be ~$37 million for FY19. Capital expenditure is expected to be around $35 million-$40 million and the effective tax rate is expected to be ~30.5% in the second half. It also expects the growth rate for raw material costs to be low single digits in the second half.

On 17th April 2019, the company announced Nippon’s proposal to buy a full stake in DuluxGroup for $9.8 per share.

Stock Performance

The company has a market capitalisation of A$3.79 billion. The stock has 52-week high and low of A$9.87 and A$6.31 respectively. The stock of the company was trading at A$9.735, up by 0.51%, after making an intraday high of A$9.75, as on 15th May 2019 (AEST: 2:05 PM). The last one-year return of the stock is 20.7%, and the YTD return stands at 50.6%.


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